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Trudeau confident Canada will work through US softwood lumber tariffs

Wood war with the US rages on as Canada vows to fight incoming tariffs imposed by the Trump administration

OTTAWA, ON. (NEWS 1130) – The Canadian dollar dropped a bit this morning following word the US is going to impose a tariff of anywhere between three to 24 per cent on five Canadian softwood lumber exporters.

The five companies being taxed are:

Canfor: 20.26 per cent

Irving: 3.02 per cent

Resolute: 12.82 per cent

Tolko: 19.50 per cent

West Fraser: 24.12 per cent

There are reports the federal natural resources minister will be meeting this week with provincial officials to figure out a specific strategy as both Ottawa and BC plan to fight this latest move from the Trump administration.

The president feels the Canadian industry is unfairly subsidized and that it’s hurting US producers. The Canadian counter-argument is US consumers will have to pay more to build homes and buy furniture. The trade of softwood lumber and disagreements between the two countries started back in the 1980s and has had fights and trade deals all the way to the World Trade Organization over that time frame.

The BC government says the duties, in the form of cash deposits, would become effective around May 1st for at least four months, ending in August. After that, duties won’t be collected until about January 2018.

BC Liberal Leader Christy Clark has issued a message to forest workers and producers saying she will fight for them, however BC NDP Leader John Horgan is using this situation to take a swipe at her. He claims the province has lost tens of thousands of forestry jobs under Liberal power.

Trudeau remains confident

Prime Minister Justin Trudeau says the Canada-US relationship is bigger than any one trade irritant and that both countries would suffer from a “thickening” border.

Trudeau is stern but confident his government and the country will be able to work through these issues. When asked about the increasing trade tensions with the US, he notes disputes over lumber and dairy have go back decades. “I will always defend Canada’s interests. This is nothing new and this is part of the relationship that is positive, that is deep in so many different ways that we will deal firmly and reasonably with them.”

The prime minister says he’ll be speaking soon with premiers about Canada’s approach to these trade conflicts and then he plans to speak with President Trump directly to emphasize the good trade relationship Canada can offer.

He says it’s true Canada has a deeply interconnected economic relationship with the US, but that the opposite is also true. He says millions of good US jobs depend in Canadian trade, citing the North American auto sector as one compelling example.

Trudeau also says the friendly nature of the relationship means both sides will be able to work through any disputes that arise, such as those currently brewing on softwood lumber and dairy products.

Impact on BC wood

Forestry is easily one of BC’s most important industries and those levies will have a major impact one way or another.

“Forestry has really consistently been a sustained source of wealth for a lot of Canadians and for the province,” explains Harry Nelson with UBC’s Faculty of Forestry. “It can hit all those bottom lines, be environmentally-sustainable, and contribute towards more environmentally-friendly, lower-carbon lifestyles.”

But he says none of this is a surprise, adding the two countries have bickered over softwood lumber for decades.

In fact, there have only been a few years of entirely free trade in the industry. “And we know the effect of that has been essentially to restrict Canadian supply and the outcome from that is to basically boost lumber prices in the US and that’s really first and foremost what that dispute has been about,” says Nelson.

He says it will be mainly the family-owned businesses dotted across the province that bear the brunt of the new tariffs but that this won’t be the end of a dispute that spans more than 30 years.